Mulcair’s ‘Dutch disease’ hard sell in realistic Ontario

OTTAWA — So, Dutch disease. Is it working as intended? On a recent swing through Windsor, the epicentre of Ontario’s auto belt, Tom Mulcair had yet another splendid opportunity to finesse the message that has made him persona non grata in Alberta and recently earned him an indirect rebuke from the governor of the Bank of Canada, Mark Carney.

Here’s what the NDP leader offered instead, speaking to the Windsor Star: “The manufacturing sector has been hit particularly hard here. Yet the government puts all its eggs in the resources basket while manufacturing loses hundreds of thousands of jobs.”

So we’re in for more of the same, apparently: Canada’s manufacturing sector, Mulcair will argue for the next three years, has been crippled by the “artificially” high Canadian dollar, which makes our exports less attractive abroad. The culprit is soaring resource revenue, particularly in the oilpatch, which has driven up the value of the loonie.

If Big Oil were forced to assume its downstream environmental costs, goes the logic, those profits would be reduced, the dollar would soften, and the world would buy more Canadian, rather than, say, Chinese or Indian. Two problems solved: First, Big Oil stops befouling the environment. Second, the good old days of $70-plus-an hour auto factory jobs (including benefits) are here again. Really? Since he became leader, Mulcair’s strategy for tackling the Conservatives has been two-pronged. He attacks them on issues of governance, abuse of democracy and the democratic process. And he tries to undermine the core of the Conservative brand, which is sound economic management. In the opening week of the fall session both themes have been front and centre. There will be little deviation, it appears, from these themes.

On the first question, the democratic deficit, the Conservatives are now deeply vulnerable. When Allan Gregg, a veteran pollster and trueblue Tory of the old Mulroney-Clark school, calls your government “Orwellian,” and people who know you quietly nod, you have a problem.

On the second question, given continuing anemic growth, stubbornly high unemployment and now the beginnings of a housingprice slump, you might expect there to be fertile ground as well. Yet recent polls, for what they’re worth, show the NDP and Conservatives more-or-less neck and neck in national public support, with the Conservatives marginally ahead. Why?

Part of it, no doubt, is the government’s dogged insistence on speaking only about jobs and the economy, always. It’s utilitarian, unambitious fare, but it has the advantage of appealing to Canadians’ kitchen-table conservatism.

But part of the Conservatives’ resilience also arguably has something to do with Mulcair himself — and the way in which he has rather pointedly failed to live up to the promise of centrism with which he got himself elected leader of his party last spring.

The strategy underlying “Dutch disease” is not complex: Mulcair intends to smash the new Conservative union between Ontario and the Prairies. He is placing his hopes in Quebec, Ontario, and British Columbia. The math, particularly with the seat increase in the offing for 2015, makes it obvious: Ontario with 121 seats, Quebec with 78, B.C. with 42, of a total 338. These three provinces together will account for 241 seats — about 70 per cent of the total.

But here’s where the logic crumbles, as Carney noted earlier this month: Though upward pressure on the dollar due to high resource revenue is incontrovertible, other factors weigh on heavy manufacturing — most importantly globalization and competition from lower-cost economies. With India producing an ultracompact car, the Tata Nano, that sells in India for the equivalent of $2,500 U.S., the trend is inexorable. Hobbling the oilpatch won’t reverse it.

Moreover, energy producers collectively are already doing far more than the average SUV-driving Canadian to address both environmental degradation, and the production of greenhouse gases. The oilpatch accounts for 6.5 per cent of the nation’s total GHG production; home heating and electricity generation, about 14 per cent; transportation, about 30 per cent. Financially, the energy sector accounts for about one-third of the weighting of the S&P TSX Composite index. It is also, along with mining, the only strong growth area in the Canadian economy now. The strong dollar likewise has benefits for consumers, and for Canadian businesses purchasing equipment and supplies abroad. The simplistic message is just that — simplistic.

Mulcair appears to believe that Ontarians, especially those hit by the manufacturing slump, won’t dig beyond the headlines. But this is the same population that made former Ontario Progressive Conservative Premier Bill Davis an institution, and that has three times in increasing numbers helped elect a Harper Conservative government.

Ontarians are, as a rule, pragmatic centrists — fiscally conservative, socially progressive. No Canadian leader in modern history, not Mulroney, not Chrétien, not Harper, has managed to budge those goalposts one iota. It seems unlikely Tom Mulcair will be the first.